Photo: VCG

Editor's Note:    

Shaun Rein (Rein), founder and managing director of the China Market Research Group, first came to China in 1997. Over these more than two decades, Rein has witnessed massive changes in the country, as well as changes in China-US ties. As a businessman who comes from a country with a Western-style democratic system, how does he comprehend China's "xiaokang" society? Is he optimistic about China's future development after China reaches its "xiaokang" goals? Rein shared his views with Global Times (GT) reporter Li Aixin. Many Westerners don't believe what's happening on the ground in China, which story needs to be told to the rest of the world, he said. 

GT: You've been living in China for about 20 years. Do you recall what your life was like when you first came to China? Now, 20 years later, what changes in people's lives impress you the most?  

Rein: I first arrived in 1997 to study at Nankai University in Tianjin, China, for the summer. The China in 1997 was completely different from the China in 2021. In 1997, a lot of people were poor. You'd see people lining the street with cardboard signs looking for work. This was just after the state-owned enterprises reform which caused a lot of layoffs then but eventually  made the SOEs more economically productive. 

When I interviewed Chinese people then, a lot of them said they struggled to be able to put a roof over their family, clothes on their kids. In 1997, Chinese were really looking for daily basic necessities. 

Now when you look at the numbers in 1989, for example, China and India had the same average GDP per capita, of $300. Now, China's average per capita GDP is over $10,000 while India's is only around $1,800. Obviously the Chinese government, the CPC, has done something right to improve the quality of lives of the vast majority of Chinese from an economic standpoint and across almost all important metrics, such as access to health care, education and gender equality.   

In 1997, people were on the street looking for work. In Tianjin at the time, 300 yuan a month was a good wage. We are talking $35-$40 a month. Now you see lot of white collar jobs have been created in the last 25 years, be it university educated Chinese working in companies like mine or for Chinese firms like Alibaba or Tencent, or starting their own companies. Financially, Chinese have a good quality of life. 

When you take a look at education, in 1989, much more males were literate than females. Now, over 98 percent of both males and females are literate. It's almost parity. 

When you look at the quality of life for everyday Chinese, it's clear they can get jobs now, good jobs. They can also get access to education, whether they are male or female, whether they are from an urban area or from a rural area. Those are massive changes in the last 25 years that I think the rest of the world doesn't give the CPC enough credit for. 

To me, being able to feed your family, to give education to your family - a stepping stone to a better life, and an access to health care, those are probably the three most important human rights, not being able to carry a machine gun like in the US. By all key metrics, China has improved the quality of life for the vast majority of citizens since I've been here.

GT: As a citizen who comes from a Western democracy, how do you comprehend China's "xiaokang" society, or moderately prosperous society? From the perspective of "building a moderately prosperous society in all respects," how would you compare the political goals of China and the US? What do you think are the major differences? 

Rein: It's great that Chinese can get rich now. And if you look at it, there have been more billionaires and more millionaires created in China in the last 20 years than in any other country. Over half of the world's female billionaires are from China. 

It's important that a government ensures that everybody gets wealthy and you don't have just the rich getting so rich that they control the economy and ultimately stifle competition, or stifle upper upward economic mobility. This is what you're seeing in Hong Kong, where like five families control 50 percent of the economy. The anger in Hong Kong initially was due to lack of upward economic social mobility because five tycoons control everything. It has nothing to do with the CPC. It's economic anger. But it's also in the US. It is shameful how in the US, in San Francisco, where all the world's tech billionaires are, there are homeless people all over the streets. It's shocking. The rich in the US have gotten too rich, while the poor have gotten too poor, because the US is not what I call compassionate capitalism. It's not fair capitalism. It's now crony capitalism. You have a corrupt system where the corruption is legalized, where rich people, special interest groups like the National Rifle Association can donate to senators, representatives and presidents legally, and they know they're going to get something in return. 

The whole political donation business is legal in the US, but in China that would be called corruption and everybody involved would be put in jail. That's the problem happening in the US right now, there's too much corruption in the democratic system. 

Democracy isn't bad. Communism isn't bad. I don't see any political system is inherently bad. Countries, I believe, should have self-determination and should be able to choose what political system they want. But what has happened in the last 20 years is American-style democracy has become distorted and is not letting the lower classes or the middle classes improve their quality of life. 

When it comes to China's moderately prosperous initiative, I like it, because it's saying people can get rich here. There are a lot of billionaires in China, but it also means that the country is going to try to help everybody, make sure that there's nobody left behind. It also means you need to guide the country morally and intellectually to think about not just making money. When you say to everybody, let's be moderately prosperous, it's letting the Chinese people think about not to get rich for the sake of getting rich, but about moderately prosperous. I think the CPC is smart. It's saying there is more to living than just getting rich. Let's also be part of the community, let's be part of China and let's take care of each other. 

Shaun Rein Photo: Courtesy of Rein

GT: What do you think is the key reason behind China's accomplishment in building up a moderately prosperous society in all respects?

Rein: China has achieved it because the whole country is unified. The government, private business and individuals, they're looking for the better future. This is one of the problems in the US. When Trump said to make America great again, or when politicians say we were better off 50 years ago, they are looking to the past, they are looking to nostalgia, by its definition it means, life was better 50 years, and something bad has happened, let's go blame somebody. In the US, what that means is scapegoating China - China has stolen our jobs, and China has stolen our IP, even though Huawei leads 5G around the world.  

The US is looking to the past. China, by saying we have achieved moderately prosperity and we're moving forward, they are looking for the future. And so people know they might need to sacrifice now and work with others, cooperate with others, in order to have a national success story, five years from now, 10 years from now, 20 years from now. The US is always looking to scapegoat somebody - why is my life not as good as before? 

When you hear politicians in the US, they say the world is not good like it was in the 1980s because of the Chinese. But when I was growing up in the US in the 1980s, they were saying the 1980s is not good because of the Japanese or the Soviet Union, the US was better in the 1970s or in the 1960s. 

GT: When it comes to poverty relief, the US places more emphasis on "big market, small government," while China brings the "big government" into full play. In your opinion, which way is more efficient? Do you think there may be some good points in China's "big government" way, like in poverty alleviation or infrastructure construction, that the US could learn from? 

Rein: The US should learn from the best parts of the Chinese system which is applicable to the US. I don't think they should adopt the Chinese system, each country should have their own self-determination. I don't have a problem with American-style democracy. What I have is how corruption and special interest groups have distorted American-style democracy. Similarly, I think China should learn from the US the best parts of the American system. 

If you look at Chinese Party officials, they might spend three years in Beijing and then they are sent to Tibet, then to Shandong and then they go to Yunnan… So they understand all the different local areas and they're unified and say, we need to help China as a whole. In the US, we have elections every two years for representatives and every six years for senators and it's based on a state. They very often only care about themselves and getting reelected first, and then their local interest. 

If you talk to Senator Tom Cotton from Arkansas, he only knows and cares about the people who will vote for him in Arkansas. He doesn't care about what happens in California, doesn't care about what happens in New Hampshire. So the problem with the US right now is that officials think in short term or too much on the local voters. They don't care about the country as a whole. That's one massive issue. 

Second major problem is the war machine. The US is always in endless wars. We've been in Afghanistan for 20 years. We're just leaving now. The US always creates foreign enemies in order for officials to get voted again. If Cotton says, "China is evil, I will be strongly against them with military defense."These Americans who don't know anything, will vote for Cotton, because they're scared. You have people like Defense Secretary Lloyd Austin. He ran the American military operations in Iraq. When he retired, he worked for Raytheon, the weapon manufacturer, as a member of the board of directors. Now, he is the secretary of defense. The American war machine has strangled the American political system. The US should learn from China and not allow former generals to go into politics or to go into business. Once you retire as a military person, you should stay retired. 

The problem is you get these military guys who want a war in order to get famous, so they can make millions of dollars a year after they retire working for private equity firms or weapons manufacturers. That needs to stop. 

GT: How many Americans do you think share your view?

Rein: Unfortunately, very few, especially in Washington DC. You can't have a rational, pragmatic conversation there right now. DC elites get hysterical about China. It's like they've lost their mind. You have people saying all Chinese or many Chinese in the US are spies. It's insane. They say that every Chinese company is going to spy on the US, take Huawei. 

When it comes to common Americans, I haven't been to the US since the outbreak of COVID-19, but when you look at a lot of surveys, the majority of Americans right now hold China in a negative view. It's not hard to see why. American press very often likes to use rumor and innuendo as facts on China, but they never provide evidence. 

If you are an everyday American, and all you get is information on China from The New York Times, The Wall Street Journal, you would hate China too, because they're lying. A lot of those journalists are not qualified. A lot of journalists who cover China as a career do not speak Chinese. 

When I say things about China, I have friends who I've known for 30 years will say, "you're lying" or "you're stupid" or "you're fool," because they don't believe what's happening on the ground in China, because they are being lied to by a biased narrative from the US government and US media outlets. 

GT: You tweeted very recently to suggest Americans  visit a country like China, and you noted when they go back to US, they'll still love the US but realize US is failing on violence, partisanship, infrastructure… they would realize the US is not so exceptional. It is believed that Americans still love the US. Do they also have confidence in the American system today? 

Rein: I'm a very patriotic American. But the reality is that most Americans still think the US is exceptional. They still think the US is a great country and better than everywhere else. The problem is the Democrats say that the Republicans are evil and destroying America. But when you talk to Republicans, they say the Democrats are evil and destroying America. Everybody sort of hates China right now. But when it comes to the internal system, they don't realize how broken the system is, they just say, if we win and the Republicans lose, or if we win, the Democrats lose, everything will be okay, we're still the greatest country. 

They're blind and oblivious to the very real problem that are going to hurt the US over the long term - the homelessness, crime, violence, the lack of access to health care and education. It's scary that 70 percent of Americans have to take a loan to go to universities. It's scary that we're not even trying to ban guns in the US. Americans love America as they should, and America is a great country. But too much of it is they're blaming the other party politically or blaming China and they're not looking at cohesive ways of fixing the problems. 

That gets back to your earlier question. This is something that the US can learn from China - get the entire bureaucracy try to solve the problem together. But nobody in the US wants to solve anything together. People there try to get elected and demonize the other party. 

GT: After China realizes "xiaokang," whatever comes next, be it goals or challenges, will be more difficult. As a businessman, are you optimistic about China's development efficiency in the future?

Rein: I am very optimistic on China's economy. As a businessman, I would still invest in the US, there are still good opportunities to make money even though there are a lot of political risks and political chaos. But over the next 10 or 20 years, it's quite clear that China is going to be the economic driver for even the largest companies globally. It's got a stable political system, a happy, optimistic population, and the best infrastructure in the world by far. Chinese companies are coming on strong. Chinese companies are fast moving up the value chain in terms of quality control and in terms of branding. 

For instance, why would you buy Adidas clothes when you can buy Li-Ning, which is as good if not better than Adidas. Why would you buy Laurent when you can buy Perfect Diary for makeup?

I also have some advice on what the government can do. The government needs to streamline bureaucracy even more. It's still too over-regulated and there are too many licenses and approvals in places. The government is doing an excellent job on making things simpler, but more are needed to be done.  

Second, China needs to get better at how it markets itself to the rest of the world. The US has announced that it's going to spend about $300 million a year in media to counter China's rise and to denigrate China's Belt and Road Initiative. Americans are the masters of propaganda. China still needs to learn from the US how to reach out better to the Western world and the rest of the world. The US is going to continue to try to contain and destabilize China. You see it in Hong Kong, Taiwan, you see it with Huawei, with Quad, with Americans being very good at building alliances… China needs to get better on that. 

Having more English language media is good, having more videos is good, having more opportunities for people to see the real China is good. For example, foreigners could be given more convenience to visit Tibet instead of requiring them to have a special permit. I just went into Tibet, it's amazing. The quality of life improvement, from the first time I went in 2001, is incredible. That story needs to be told to the rest of the world.